Ziegler announced another bank financing after a spate of recent closings, including a construction financing for a Michigan CCRC, a refinance of a Pennsylvania CCRC and one for a CCRC in Texas, just to name a few. The most recent deal was arranged for Warm Hearth Village, a not-for-profit CCRC in Blacksburg, Virginia that was founded in 1974. It has since grown to 259 independent living units, 55 active adult units, 150 assisted living units and 60 skilled nursing beds on a 220-acre campus.
There were nine outstanding direct bank placements with three different banks on the property, so ownership sought to consolidate debt and also fund about $2 million in planned campus improvements. So, Ziegler solicited ten commercial banks for a taxable loan totaling $17.99 million, with the CCRC ultimately selecting National Bank of Blacksburg due to its pricing, full-term commitment and favorable covenants.
The loan comes with a 20-year level debt service amortization at a fixed rate of 3.34% which will reset after 10 years based on the 10-year Treasury rate with a floor of 3.34% and maxed out at 4.34%. There are also flexible prepayment provisions which allow for the loan to be fully repaid at par starting in year-five. Even with the additional $2 million of new money for the campus improvements, the CCRC was able to reduce its annual debt service by about $550,000. This was the first deal Ziegler had completed on behalf of Warm Hearth, but maybe not the last.
